RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

We received Eurozone inflation data in the overnight, and it slowed -0.9% vs 0.4% m/m and 1.3% vs 1.4% y/y.  This is in the wake of a softer German PPI reading (2.1% vs 2.3% prior y/y) and ZEW (Business Conditions) Survey reading of 92.3 vs a prior reading of 95.2 m/m and 17.8 vs 20.4 prior y/y .  For the time being our outlook on Europe and the Euro currency is tilting bearish.  A stronger exchange rate vs the USD is not exactly a boon for Europe’s exporting business climate.  If you take a look at a MCH Euro Weekly Chart we have been making a series of lower highs and lower lows for the past four weeks, but largely trapped inside a 1.25-1.22 trading range.  Technically speaking, a break of the low end of the range (1.2230), could drive the Euro back down towards 1.2075. The fundamental catalyst would likely be a more dovish leaning Mario Draghi as a result of weaker economic data.  For the time being, our recommendation is to manage the range of 1.25-1.22. The longer term (3-6 month) Euro chart remains bullish trend, but beware of a near-term correction higher in the USD and and softer economic data releases out of Europe.

Euro Mar ’18 Daily Chart


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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. Prior to becoming a broker he did some individual trading on his own, where he first began to study and interpret different market strategies and ideas. In 2006 John moved over to Lind-Waldock where he began to service clients as a professional broker. He joined RJO Futures in 2011.
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